INCURRING DEBT MANDATORY WITH BREACH OF FIDUCIARY DUTY

An important California family law decision was handed down earlier this year dealing with breach of fiduciary duty in a dissolution. In the case, a California appellate court has ruled that the trial court erred by refusing to award attorney’s fees to husband under Family Code §1101(g) for wife’s violation of her fiduciary duty, because such an award is mandatory under that statute.

In re Marriage of Fossum, 192 Cal.App.4th 336 (2011) the facts indicate wife had incurred a $24,000 credit card debt prior to separation without the knowledge or consent of husband. This was a no-no because the law clearly states that in California dissolution actions, debts incurred without the consent of the other spouse may be assigned to the party incurring the debt.